" are in demand for the energy sector, and that's something positive for a country that's looking for investment," Mr. Bahah told Embassy.
Before his diplomatic career, Mr. Bahah worked for Nexen in Yemen in various areas including finance, human resources, planning, and joint venture operations. It was his first job.
He said he viewed the bid, which has kicked off a national debate in Canada about foreign ownership of the Alberta oil sands, positively because it could mean more investment into his country.
"It's not easy, but we have to accept the change, always," he said noting that the Canadian government would likely analyze the bid carefully before making a decision.
And while some in Canada have raised concerns about CNOOC being a state-owned enterprise, Mr. Bahah said he doesn't see that as an obstacle in Yemen.
"That is something not new for us, because we have dealt with them in the country before...we have good relations with the Chinese companies in the country and we have experienced that they are professional," he said.
Nexen is currently producing about 5,000 barrels of oil per day at one group of sites in Yemen, called a block. The contract for these operations expires in 2023. After producing one billion barrels of oil at another block, the company handed those oil fields to the Yemeni government when its production sharing agreement expired in December.
Mr. Bahah said he saw the bid as more of a change in ownership, rather than in management—and that the two companies would be a dynamite partnership.
"If we get the capital of the Chinese and we get the culture of Nexen, I think we can good investment in Yemen," he said.
He is also hoping CNOOC will restart an education swap Nexen had established with the Yemeni government, that brought 10 Yemeni undergraduates to Canada each year to study. The program was discontinued this year for new students.
"We have seen it as a very good future bridge between the two countries, having graduated from Canada, getting back to their countries and still serving for the interests of both countries," he said.
Regulatory obstacles ahead
Nexen announced on July 23 that its board had unanimously approved a $15.1 billion bid by CNOOC. A document outlining the terms of the acquisition on CNOOC's website states that as part of the proposed deal, the company would have the head office for its North and Central American operations in Calgary. It would also keep Nexen's current management team and employees.
Industry Minister Christian Paradis confirmed on July 23 that the acquisition would be subject to review under the Investment Canada Act. That process uses the government's "net benefit" test, where Mr. Paradis gets to decide behind closed doors whether certain investments are of net benefit to Canada. The Competition Bureau would also do a review of the proposed transaction.
Nexen also has offshore operations in the UK North Sea, offshore West Africa and in the Gulf of Mexico, meaning not only would the Canadian government need to approve the bid, but also the governments in China and the US, and possibly others as well like the European Union, according to the Chinese firm's document.
Both the US Embassy and the British High Commission declined to comment. The EU delegation did not respond to a request for comment before print.
The bid has also made headlines in the United States, where some lawmakers have been calling on the US government to block the bid unless certain conditions are met. Democrat Congressman Ed Markey has sent an open letter to US Treasury Secretary Tim Geithner raising a red flag over the proposed acquisition.
Mr. Markey is calling on the US government to block the deal unless "parties to the merger agree to pay royalties to the US taxpayer on all oil produced off American shores or relinquish any ownership interests in these leases."
His office did not respond to a request for comment before print.
US Democrat Senator Chuck Schumer has also said the deal should be used to get more access for American companies to the Chinese market.
Barry Carin, who has held several government portfolios including assistant deputy minister for the Department of Foreign Affairs and International Trade, said American lawmakers could insist that any assets under control of US legislation be divested and sold.
But few people know whether US government officials would actually follow through, he added.
"The fact that one or two senators say something doesn't mean that the government and the Congress is going to act," said Mr. Carin, who is also a senior fellow with the Centre for International Governance Innovation.
"The concern across the border is that if there is a contract to sell resources to China, then they can't be sold to the US...they might have to buy from less secure sources of supply," he said.
To add to all the necessary approvals, the US Securities and Exchange Commission also reported on July 27 of alleged insider trading before the acquisition announcement by Hong Kong-based Well Advantage Ltd. and "other unknown traders."
That has the NDP calling for greater public scrutiny over the bid. In a July 31 press release, industry critic Hélène LeBlanc called for the Conservative government to "agree to hold a thorough, transparent and public review of this takeover," and natural resources critic Peter Julian said public hearings would allow the government to "show they are on the side of Canadians, not the company."
'Send the right signals'
Ron MacIntosh, a research associate at the University of Alberta's China Institute, said it would only be surprising if Canada decided to block the deal.
"If we suddenly turn it down without good reason...that would set us back not only in Chinese eyes, but possibly as a player in China's enormous energy market," he said.
"It's very important to send the right signals when deciding what the net benefit is, that we don't put brakes on what is a very nicely evolving...China policy, and a bit of an upset to our open for business investment policy by reversing on this."
Fen Hampson, director of the Global Security research program with the Centre for International Governance Innovation, noted that Mr. Harper has said Canada is open for business on more than one occasion.
Gregory Thomas Chin, a political science professor at York University and a former diplomat, agreed that rejecting the proposal would send a very mixed message to the Chinese. But he also noted that if the deal does go through, it would be important to have an open and transparent process.
There are several things the Canadian government should think about when making its decision, said former Canadian diplomat to China Brian McAdam. This includes where the oil would be refined or whether the Chinese company would bring in temporary workers.
For Wenran Jiang, the Mactaggart Research Chair of the China Institute at the University of Alberta, it is important to work with the Chinese rather than push them away.
It is also better for China to be investing in Canada, than putting money into undemocratic or unstable nations, Mr. Jiang said.
Joseph Caron, former Canadian ambassador to China, said the proposed acquisition is an inevitable step—if not Nexen, then it would likely be another company.
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Online: http://www.embassymag.ca/page/view/cnooc-08-01-2012